This year not-for-profit hospitals and health systems will have stable, although somewhat softer, operating performance compared with 2006, predicts Moody’s Investors Service. The sound economy, relatively favorable Medicare rates, and hospitals’ strategic initiatives bode well for fiscal performance in 2007. But the midterm outlook for 2008 and 2009 is “uncertain” as not-for-profit hospitals face increasing inpatient and outpatient competition from other providers, lower Medicare reimbursement and continuing decreases in commercial rates, physician shortages, more uninsured patients, and higher capital spending. “These factors will most likely weaken hospital financial performance, further challenging management to control expenses as many of the current and proposed large capital projects financed by debt and cash on hand come on line,” says Moody’s. For more information about this report, call Moody’s at 212-553-4431.
